The City of Mineral Wells is requesting proposals from qualified consultants to prepare a comprehensive water and wastewater rate study, including model development. The intent of the study is to independently analyze and assess the City’s current rate structure, determine an updated cost of service, and provide recommendations for equitable, sustainable cost recovery by customer class.

Overview
The City desires a comprehensive rate study, which will require a qualified consultant or consulting firm. The purpose of the study is to provide the City with information sufficient to support a recommendation to the City Council for adjustments in rates for water and wastewater operations. This study will also determine the adequacy and most appropriate rate structure for all utility rates assessed by the City considering such issues as conservation, consumption characteristics of various customer classes, deviation from cost of service principles and fairness and equity implications, and customer understanding. The City expects the rates developed by the study to be adequate for at least two years and the rate schedule (i.e. comparative rates by customer class) to maintain its integrity for at least five years. The rates will also need to include appropriate amounts to fund construction of the Turkey Peak Reservoir project.

Analyze Utility Fund Finances
Consultant will be expected to analyze and obtain a thorough understanding of the Utility fund's financial condition. The analysis is expected to include at minimum:

Analysis of historical operating expenses including cost of water purchased and wastewater treated.

Analysis and evaluation of Utility Department's capital improvement program, and determination of funds needed to support the capital improvement program.

Analysis of historic demand and consumption characteristics with the purpose of properly classifying and segregating the costs associated with the different functions and customers of the City's utility system.

Analysis of existing Utility fund financial condition and the planned infrastructure improvements, to include the Turkey Peak Reservoir project.

Analysis of the impact of peak demands on the cost of providing service.

Develop Rate Schedule
The consultant will be expected to develop a schedule of water and wastewater rates. The rates must be developed in context with the City's financial policies related to user charges as described below:

The City will establish user charges and fees at a level that attempts to recover the full cost of providing the service.

User fees, particularly utility rates, should identify the relative costs of serving different classes of customers.

Where possible, utility rates should be designed to reduce peak (hour and day) demands on the utility systems and encourage conservation.

The City will make every reasonable attempt to ensure accurate measurement of variables impacting the revenue streams (e.g. verification of Palo Pinto County Municipal Water District #1 future projections, accuracy of water meters, growth estimates).

In addition to the above policies, the developed rate schedule must meet the following characteristics:

Be compatible with the existing utility billing computer system.

Be easily described to customers and lay persons.

Encourage conservation.

Benchmark to Area Cities
The consultant will be expected to compare and contrast the City's existing water and sewer rates and the new rates developed by the study with the rates of comparable cities within the region and state, and/or other mutually agreed upon cities. The benchmarking must be for all comparable customer classifications. The benchmarking aspect of the study should include comment as to whether the developed rates will materially impact the ability to attract and retain retail and commercial businesses.

Develop Computerized Rate Model
The consultant will develop a computerized rate model that will be provided to the City at the conclusion of the study. The model should be developed with the following characteristics:

Model must be developed using Microsoft Excel applications.

Model should allow for updating of consumption patterns by customer classification.

Model should allow for updating of operating, debt service and capital costs.

Model should include pre-defined graphical presentation of consumption, revenue and expense data.

Model should integrate the revenue produced by rates with the Utility fund financial plan.

Consultant will train city personnel to periodically update model costs factors and develop scenarios by rate and customer class.

Discuss Findings and Present Final Report
The consultant will be expected to present the analysis findings with senior management staff, address questions and/or concerns and incorporate management comments into final recommendations. The consultant will make a final presentation to City Council.

Publication Date/Time:

11/11/2017 12:00 AM

Closing Date/Time:

12/12/2017 2:00 PM

Submittal Information:

Proposals must be supplied on a CD or flash drive with seven hard copies.